The Pebble Group’s AGM update confirms that trading is in line with FY24 expectations, with attractive opportunities for its two distinct businesses in the large, fragmented promotional products sector. Facilisgroup is a SaaS business, helping North American distributors to optimise their operations, with access to an approved supplier roster. Brand Addition services global brands’ needs for branded product for in-house and external programmes. The well-publicised dip in tech sector marketing sp...
MotorK’s FY23 revenue growth was robust across most regions, with slow growth regions gaining momentum. Q124 revenue fell slightly year-on-year due to delayed delivery contracts, but these are expected to contribute to Q2 sales. Revenue quality improved, with software-as-a-service (SaaS) recurring revenue rising as a share of group revenue in FY23. M&A continues to play a pivotal role in unlocking opportunities across MotorK's markets, providing potential average contract value (ACV) expansion f...
Newron Pharmaceuticals has shared positive top-line data for its evenamide programme from its potentially pivotal Phase II/III trial (study 008A) in patients with poorly managed schizophrenia on current antipsychotic therapy, but not considered treatment-resistant. The trial met its primary endpoint of improvement on the Positive and Negative Syndrome Scale (PANSS) score from baseline, and the key secondary endpoint of improvement on the Clinical Global Impression of Severity (CGI-S) scale. Stat...
Cobra Resources is an exploration company focused on developing a rare earths deposit in South Australia, with a potentially low-cost method of production through in situ recovery (ISR). ISR is a proven, low-cost method of extraction in the uranium industry and dominates the bottom third of the uranium cost curve. Its scope for lower capital and operating costs is potentially a game changer for rare earth extraction, where Western producers are struggling with cost inflation and volatile commodi...
Esker reported FY23 results in line with our expectations. Revenue grew 12% (14% constant currency) while inflationary effects and sales commissions on bookings outperformance in H223 resulted in operating profit declining 16% y-o-y. The high level of contracts signed towards the end of FY23 provide good support for revenue growth in FY24 and FY25 and measures taken by management to improve productivity should drive margin expansion over our forecast period back into the company’s target range o...
Notwithstanding its sector ‘sweet spot’ (a healthy, customisable product at a competitive price), Tortilla Mexican Grill (Tortilla) has taken the opportunity of a change in management to refine its strategy to address challenges since its successful IPO in 2021 as well as expedite growth. Significant benefit is expected from a new delivery structure to mitigate commission charges in an important part of the business (c 30% of sales), from enhanced marketing to tackle surprisingly low brand aware...
Vection’s Q324 update showed strong double-digit growth in revenue and cash receipts, driven by multiple contract wins, including its largest contract to date with an existing defence customer. A swing to positive operating cash flow in Q3 (A$4.1m), coupled with contract wins, validates the company’s streamlined sales structure, designed to bolster operational efficiency. Cash generated also supported a quarter-on-quarter reduction in debt. Management is seeing early positive signs by enhancing ...
The Merchants Trust’s (MRCH’s) manager, Simon Gergel at Allianz Global investors, is very excited about the number of reasonably priced opportunities available in the UK market. Also, good income generation from the trust’s portfolio of high-quality companies with robust fundamentals enabled MRCH to record another consecutive dividend increase in FY24; it now has a 42-year track record. The trust’s attractive 5.1% dividend yield is one of the highest in the 19-strong AIC UK Equity Income sector ...
AVAX’s FY23 results highlight the group’s progress domestically as the market improved, more than offsetting the weaker international performance at the top-line and EBITDA level. Group revenue and reported, continuing PBT exceeded our forecasts by 13% and 28% at €453.5m and €16.7m, respectively (FY22 revenue and PBT of €402.7m and €18.5m). This is largely attributable to a much stronger than anticipated performance from the construction segment, achieving revenue of €427.8m (Edison forecast: €3...
Hostelworld’s pioneering and fast-evolving ‘social’ strategy is delivering aplenty. Material outperformance of the hostel market (FY23 bed nights sold up 30% vs industry 8%) and low-cost acquisition and retention of high-value customers (over a million social members after just 18 months) confirm the success of the company’s app-centric model, which taps into the social media habits of its target demographic to mutual benefit. With reducing marketing percentage of revenue on track to meet the FY...
Epwin’s FY23 results were robust and management navigated inflationary pressures well. Despite some market headwinds, we have increased our FY24 and FY25 underlying operating profit estimates for the second time this year. Long-term, well-established growth trends imply that Epwin is well-placed to leverage off increasing demand for its energy-efficient and low-maintenance building products. Epwin offers an attractive investment case with the potential for uplifts from additional self-funded M&A...
Princess Private Equity Holding’s (PEY’s) 12-month NAV total return (TR) to end-February 2024 was a modest 0.6% amid low exit activity across private equity (PE) markets. That said, if the pick-up in global M&A volumes witnessed earlier in 2024 continues, it should support PEY’s exit activity. This in turn would translate into improved returns if PEY delivers sizeable uplifts to previous carrying values upon exits, as it has done historically. In this context, we note that PEY has a good pipelin...
ProCredit Holding (PCB) has decided to build on its recent solid performance (FY23 return on equity, ROE, of 12.2%) and announced an updated strategy to drive its ROE to 13–14% in the medium term. PCB’s management aims to achieve this by becoming a universal bank for micro, small and medium-sized enterprises (with an increased focus on the lower end of the segment) and private individual clients. This should allow it to grow its loan book to more than €10bn, bring its deposit-to-loan ratio above...
On April 25, Mytilineos (MYTIL) announced, as part of its strategic review, that it is considering a potential international listing on the London Stock Exchange (LSE) within the next 12–18 months. Listing on the LSE would demonstrate a strong vote of confidence by MYTIL in the UK market and aligns with its international growth ambitions, allowing the company to leverage its geographically diverse portfolio of operations. It would provide greater liquidity for investors and enable MYTIL to conti...
While AFT continues to gain commercial traction from Maxigesic/ Combogesic IV sales in the US (launched by partner Hikma in Q1 CY24) and anticipates the launch of Crystaderm in China, a strong R&D pipeline is central to AFT’s long-term growth ambitions. AFT recently announced the seventh addition to its R&D portfolio, a non-invasive topical alternative treatment for keloid and hypertrophic scarring, addressing the limited treatment algorithm for keloid scars (raised, thickened scars). This devel...
On 18 April, AGBA announced a surprise deal to acquire 100% of Triller Corp, a global AI-driven social video platform, in an all-stock transaction. Triller is privately-owned but has been independently valued at US$3.2bn. AGBA’s management is using a US$4bn valuation for the combined entity, in which AGBA shareholders will own 20% and Triller shareholders 80%. Triller recorded FY23 revenues of US$45m on 450m user accounts and 2.2m creators but is loss-making. In FY23, AGBA reported revenues of U...
FY23 was a transitional year for Biodexa, following the restructuring announced in March 2023 into a therapeutic company from a drug delivery specialist, and the implementation of cost-saving initiatives in light of the macroeconomic environment. The pipeline expansion primarily de-risks the business, partially fulfilled with the acquisition of lyn kinase activator tolimidone, for type 1 diabetes (T1D), in late 2023. Management estimates gross cash of £5.97m at end-FY23 to provide a runway into ...
Norcros’s disposal of Johnson Tiles is the latest strategic activity taken by management to better allocate capital to fit with priorities. Last year it closed its UK adhesives operation. Norcros has a compelling investment case, where its new product development initiatives, market positioning and self-help initiatives allow it to take market share in both the UK and South Africa. Its rating is low at 6.0x FY24e P/E, which is attractive, especially when compared to its yield of 5.4% on its well...
Henderson Far East Income (HFEL) has consistently delivered on its objective to provide a rising dividend. However, like many investors, HFEL’s managers overestimated the potential for a post-pandemic rebound in China. The trust’s resultant overweight to Chinese consumer and other cyclicals led to a fall in portfolio revenues and underperformance in the financial year ended 31 August 2023 (FY23). With a view to improving future returns, HFEL’s board has since indicated an increased willingness t...
Freelancer’s Q124 results were mixed. Operationally, the company is seeing rising demand for AI specialists as customers seek affordable ways to develop proprietary AI. Notably, in Enterprise, the company delivered a large-scale AI pilot for a tech giant, sourcing 20,000 freelancers in 24 hours across 52 languages. This impressive achievement could lead to a substantial multi-year contract. Major initiatives across Loadshift and Escrow with leading organisations are set to be deployed over the c...
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